Stocks have been higher since the open after Nvidia (NVDA) beat expectations, giving a boost to the semiconductor sector, and following President Trump's report last night that he has a call scheduled "very soon" with China's President Xi. The chipmaker's results and President's statement are both helping to soothe a jittery market, which is looking to end a roller coaster week with an up session.
ECONOMIC EVENTS: In the U.S., housing starts dropped 4.0% to a 1.19M rate in July, falling to their lowest pace since February. On a more encouraging note, building permits climbed 8.4% to a 1.34M rate. Consumer sentiment dropped 6.3 points a 7-month low of 92.1 in the preliminary reading from the University of Michigan for August.
TOP NEWS: Nvidia reported better than expected earnings and revenue for its second quarter and guided to a "better than feared" October quarter, sending its shares up 6% near midday. UBS analyst Timothy Arcuri said afterward that he believes the company is "finally in the early stages of what should be another period of very strong growth" with the launch of the new product cycle in its key segments expected in 2020, even though the management's tone on the data center business remains mixed.
Shares of General Electric (GE) are regaining some of yesterday's losses after the company issued a response to what it called "meritless" allegations made in a report by Harry Markopolos. Also, General Electric disclosed last night that its CEO Lawrence Culp bought over 252,000 shares of common stock on August 15. In a note to investors, William Blair analyst Nicholas Heymann addressed the whistleblower report, stating that he does not believe GE's financial statements purposely misrepresent the company's current financial condition and future potential liabilities. Further, Andrew Left's Citron Research weighed in, stating that "what we have just witnessed with Mr. Markopolos is reckless, dishonest, and most importantly secretive" and disclosing that it bought shares of GE yesterday. Near noon, GE shares are up 8% after having dropped 11% to $8.01 yesterday following the fraud allegations.
Deere (DE) shares are up 2% after the farm equipment maker reported lower than expected quarterly profits but backed its 5% revenue growth forecast for FY19. Q3 results "reflected the high degree of uncertainty that continues to overshadow the agricultural sector," said Deere CEO Samuel Allen, who added that "concerns about export-market access, near-term demand for commodities such as soybeans, and overall crop conditions, have caused many farmers to postpone major equipment purchases."
MAJOR MOVERS: Among the noteworthy gainers were AMD (AMD) and Micron (MU), which rose 5% and 2%, respectively, as the chip sector broadly gained after the quarterly report from Nvidia. Also higher was Teladoc Health (TDOC), which is bouncing back by 6.5% after having fallen yesterday following a short report that raised questions about the company's relationship with Health Insurance Innovations (HIIQ). Piper Jaffray analyst Sean Wieland, after speaking with Teladoc's CFO, said in a note to investors that he believes the "drama is unwarranted" and he encouraged investors to take advantage of "another buying opportunity."
Among the notable losers was Trupanion (TRUP), which fell 9% after Craig-Hallum analyst Kevin Ellich downgraded the stock to Hold from Buy, citing his growing concerns about deteriorating operating metrics, including the total addressable market for pet insurance, and the competitive landscape. Also lower was Alliance Data Systems (ADS), which slid 6% after Deutsche Bank analyst Ashish Sabadra downgraded the stock to Hold from Buy and lowered his price target for the shares to $158 from $162. The analyst sees "multiple potential headwinds" being faced by the company in 2020, he noted.
INDEXES: Near midday, the Dow was up 285.69, or 1.12%, to 25,865.08 , the Nasdaq was up 122.06, or 1.57%, to 7,888.67 , and the S&P 500 was up 39.78, or 1.40%, to 2,887.38.
Nvidia
+8.9 (+5.98%)
General Electric
+0.65 (+8.13%)
Deere
+4.31 (+3.00%)
AMD
+1.43 (+4.82%)
Micron
+0.97 (+2.30%)
Teladoc
+3.22 (+5.65%)
Health Insurance Innovations
+0.055 (+0.31%)
Trupanion
-2.49 (-8.53%)
Use symbol BFH
-8.84 (-5.80%)